# Available Tax Incentives, Credits, and Rebates in Texas

In Texas, there is no statewide solar rebate program or state tax credit. However, federal and utility-level incentives can help you lower the cost of solar. While this isn’t an exhaustive list of incentives, we’ve featured the most common and well-known Texas solar incentives that might be available to you in 2025.

## Federal solar tax credit

The [federal solar tax credit](/content/learning-center/blog/everything-you-need-to-know-about-the-solar-tax-credit/index.html) — otherwise known as the [Residential Clean Energy Credit](https://www.irs.gov/credits-deductions/residential-clean-energy-credit#:~:text=Related%20resources-,How%20it%20works,placed%20in%20service%20in%202034.) — allows you to deduct 30% of the cost of installing an eligible residential solar power system from your federal taxes. So, what does that mean exactly?

For example, if your solar system and installation costs $20,000, you’d receive $6,000 in federal tax credits to reduce your federal income tax owed in the year you installed your solar panels. In other words, the Residential Clean Energy Credit can significantly reduce the federal income tax you owe.

Everyone’s [tax liability](/content/learning-center/blog/solar-tax-credit-what-if-your-tax-liability-is-too-small/index.html) and financial situation is different. You should always consult a tax professional to confirm your eligibility for any tax credits you plan to claim.

## Property tax exemption

Texans who install eligible clean energy devices or systems, such as home solar panels, for their residence or place of business get a [property tax exemption](/content/policy/solar-sales-and-property-tax-exemption-guide/index.html) for the increased property value from the new system. It’s a win-win. A home solar system typically increases the value of a home, and you don’t pay property taxes on that increase.

## Local utility company solar rebates

As we mentioned above, Texas does not have a statewide solar rebate program. Instead, several utility companies offer rebate programs for going solar in their area. Solar photovoltaic (PV) systems and other small-scale electricity generators help offset the amount of electricity utilities need to produce, transmit, and purchase from elsewhere.

Austin Energy customers can use the Austin Energy Residential Solar Rebate to get a $2,500 rebate when installing a solar system and completing an online course.

Oncor Electric, covering Dallas and much of north and central Texas, has a rebate available for customers who install a new solar system and [battery storage](/content/solar/beginners-guide-to-home-battery-storage-system/index.html).

Here are some examples of utilities and cities offering solar rebate or grant programs in Texas:

- [Austin Energy](https://austinenergy.com/ae/green-power/solar-solutions/for-your-home/solar-photovoltaic-rebates-incentives/)
- [City of Sunset Valley](https://www.sunsetvalley.org/residents/community-programs/rebate-programs/solar-rebate-program)
- [City of San Marcos](https://www.sanmarcostx.gov/3720/Energy-Rebate-Programs)
- [Oncor Electric](https://www.oncor.com/takealoadofftexas/pages/residentialsolar)

| **Incentive** | **Type of incentive** | **Eligibility** | **Possible value** |
| --- | --- | --- | --- |
| Austin Energy Residential Solar Rebate | Rebate | Austin Energy customers | $2,500 |
| Oncor Electric Residential Solar Program | Rebate | Oncor Electric customers | Based on battery size and other factors. Paid to installer to lower installation costs. |
| Sunset Valley Solar Energy Conservation Rebate | Rebate | Sunset Valley customers | $3,000 |
| SMTX (San Marcos) Utilities Solar PV Rebate | Rebate | SMTX customers | $2,500 |
| Net metering | Bill credits | Customers of utilities with net metering | Varies by plan |
| Federal tax credit | Tax credit | Federal income taxpayers with tax liability | 30% of purchase and installation of new system |

## Net metering programs

Unlike some states, Texas does not have a statewide [net metering program](/content/learning-center/blog/net-metering-for-home-solar/index.html). This unique billing mechanism credits solar homeowners for the extra electricity their solar power system generates and adds to the [electric grid](/content/learning-center/blog/how-solar-power-and-the-grid-work-together/index.html). With net energy metering, you are billed for the "net" energy used: The difference between the total energy your solar power system produced and the total energy consumed by your home.

Your [electric meter](/content/learning-center/blog/how-does-electric-meter-work-and-what-does-electric-meter-do/index.html) keeps track of the excess power fed to the grid. It also measures the power drawn from the grid when your home needs more electricity than your solar panels can produce (like at [night](/content/solar/do-solar-panels-work-at-night/index.html) or on a cloudy day). Comparing these amounts gives you the net energy usage.

In deregulated areas of Texas, utility companies are referred to as Transmission Distribution Utilities, or TDUs. A TDU delivers the electricity to your home through the poles and wires, but generation and billing happen with competitive electric suppliers known as Retail Energy Providers, or REPs.

While many utility companies and retail electricity providers across the state offer net metering (also called solar buyback programs), not all of them do. Texas homeowners serviced by Transmission and Distribution utilities can look for a retail energy provider that offers solar buyback, including the [Palmetto Energy Plan](/content/products/rate-plans/index.html), which offers credits at the retail rate.

## Is Solar a Good Fit for Your Texas Home?

Home solar panels are often a great way to save money in Texas and across the US. Its [renewable energy](/content/solar/what-is-renewable-energy/index.html) can also provide greater energy independence from your utility company and, when paired with a battery, backup power during an outage. Every home is different, though. Working with a reputable solar company can help you get the best system for your home.

Get started today with Palmetto’s [solar savings calculator](https://luminance.palmetto.com/home/buy-solar/step-1) or by [contacting our team](/content/about/contact/index.html).

## Frequently Asked Questions

**Does Texas have a solar tax credit?**

Texas does not have a state solar tax credit. Texans can use the federal solar tax credit and local or utility incentives, including rebates, to increase their potential savings with solar energy.

**Is solar worth it in Texas?**

Texas is already one of the biggest states for solar power and home solar systems. In many instances, homeowners can save by switching to solar.